Board Entering Planning and Exploration Phase on Two Projects that would Improve and Expand District Infrastructure

NOTE:  Ferndale Schools has asked that we clarify that the purchase is not finalized, but it pending a 90 day evaluation of the site.  A purchase agreement was approved, though technically not a “purchase” until after the evaluation period, as our original headline stated.

(5/13/2011, Ferndale Schools – http://www.ferndaleschools.org/districtnews/documents/Ferndale_eNews_May13_2011.pdf)

The Board of Education held a special study session on Monday, May 9, 2011 to begin exploring two significant projects, a facilities improvement bond and the possible purchase of property.

The first, a proposal to explore a bond, was referred to the Board Operations Committee for review and recommendation following a detailed analysis by the Administration of short-term and long-term facilities needs across the district.

The second was approval to authorize entering into a purchase agreement for the 33-acre site at the corner of Eight Mile and Pinecrest commonly known as Hayes-Lemmerz.

As an integral component of the purchase, the board also authorized entering into a service agreement with Beckett & Raeder to complete an environmental study as part of a 90-day due diligence period provided in the purchase agreement.

In addition, the Board approved the reaffirmation of the Long-Range Vision for the 2011-2012 School Year.

Background on the Bond Exploration Process:

Superintendent Gary Meier presented a financial analysis provided to the district by Stauder, Barch & Associates, Inc. of the current taxable value in the Ferndale district and a window of opportunity the district is presented with to possibly pursue a facilities bond in 2012.

Meier explained that the financial advisors have determined if the district were to place a bond issue for facilities improvements on the ballot no later than February 2012, the district could generate as much as $26.55-million without raising taxes.

In addition, if such an issue were placed on the ballot in May 2012 or later, the bond capacity would be reduced to $19.25-million, and result in a bond issue tax increase.

He concluded that: “If we don’t take advantage of this window of opportunity, declining tax values will make it virtually impossible to complete the needed projects without a significant tax increase.”

Upon receipt of the Operations Committee’s findings and recommendation to the Board, next steps would be to formally approve pursuit of a bond, which requires180 days to notify the state – 3 months in advance of an election to submit an application.

Meier concluded by saying: “Our goal is that by late summer, the Operations Committee would bring a recommendation to the Board. After school starts in the fall, we will have conversations about all the projects with the community, to align our needs and proposed projects with their wishes.” The facilities improvements proposed in this preliminary recommendation include some projects that were not able to be completed at the time of the 2004 Bond, but are needed now, as well as projects that are anticipated to be needed within the next two to eight years.

Asbestos abatement at the Ferndale High School/Ferndale Middle School site is one of the more significant projects in the proposal.

Gary Sophiea, Director of Operations explained that any time a barrier to the ceilings and walls is compromised by a leak, for example, the process of repairing ceiling tiles requires thousands of dollars in asbestos abatement. Once the asbestos were removed, a leak repair could be reduced to the cost of new ceiling tiles, saving significant costs in the long run. Coinciding with the asbestos would be replacement of ceilings and lights, and mechanical upgrades that would cool all our buildings/classrooms.

Background on the Eight Mile & Pinecrest Property:

The District has reached an agreement to purchase the property formerly owned by Hayes-Lemmerz on the corner of Eight Mile and Pinecrest, providing the outcome of an environmental study and other due diligence contingencies is satisfactory to the Board.

The 33-acre property, which houses 19 structures, including several large buildings that could be used for classroom space, could provide expanded opportunities for the Ferndale Schools to offer programming, including possibly serving adult and alternative education students, reducing the annual leasing costs for the current Crossroads office building site in Southfield, for example.

Gary Meier presented the plan to the Board indicating that the district has reached an agreement with the seller for purchase of property in the amount of $950,000 to purchase the property, which depends on the outcome of the findings during the 90-day period.

Meier says, “This is an extraordinary opportunity for our school district that will not come along again. Not only is there no other property like this in our district, and its location is ideal, but today’s very low price makes this a project we can’t pass up. We would own all the property between 8 Mile to Marshall – would allow us to collaborate with municipalities to hospitals to jointly provide services to the community.”

The Board Approved the Resolution Approving Purchase Agreement” and the “Resolution Approving Service Agreement,” effective immediately. This will result in refundable expenses (if the sale is not finalized) of $25,000 in earnest money, and as much as $150K for environmental studies. The source of these funds will be the district’s contingency fund reserved annually for major facilities emergencies, bus and equipment replacements.